Sovereign citizens are a loosely-organized collection of groups and individuals who believe they are both above the law and "true defenders of the Constitution."

They follow their own set of rules and many refuse to pay taxes. The movement's followers believe, in large part, that the existing government in the United States is illegitimate and needs to be "restored." Many sovereigns refer to themselves as "patriots" or "constitutionalists." Driver's licenses, license plates, and insurance are not required, many sovereign believe, going as far as making their own identification badges and gun permits. Some members are known to turn violent against law enforcement and are notoriously hostile towards the media.

Federal government officials describe sovereign citizens as an "extremist anti-government group" and the FBI is concerned about members of the group becoming more violent, accusing them of "comprising a domestic terrorist movement."

According to a new study released Wednesday by the Southern Poverty Law Center, the number of so-called hate or anti-government groups grew last year in the United States, fueled by a deeply felt socio-economic clash between the wealthy and the rest of the country, hostility from the right toward President Obama as he prepares to run for re-election, and the ease of the Internet to spread information.

The center, which has tracked such groups for 30 years, identified 1,018 hate groups in 2011, up slightly from 1,002 identified a year before, but the SPLC said this shows a continuing trend of "significant growth" that began over a decade ago.

Sovereign citizens are growing fast. The movement is estimated to be 300,000 people strong today, and has had some notorious members -- Terry Nichols, the co-plotter of the Oklahoma City Bombing, and Joe Stack, who flew his small plane into an IRS building in Austin, Texas, in 2010, were both sovereign citizens.

"Nightline" was recently able to get inside the sovereign citizens movement, starting in a small church in Center Point, Ala., where Donald Joe Barber and his congregation of sovereigns, many of whom are middle-class and educated, were gathered to pray.

"I don't live in the United States. I live in the nation of Alabama," Barber said.

The radicalization of Donald Barber began in the 1980s, when he sold his photocopier business and got a tax bill from the IRS -- what he called an "IRS Hoax." He then dove deep into sovereign citizen ideology, which cobbles together passages from obscure law books, along with parts of the Constitution and the Bible, to justify flouting everything from tax laws to laws requiring license plates.

Using a common sovereign argument, Barber, 62, insists he doesn't need tags on his car if he is "traveling" rather than "driving," because "driving" implies that he's engaged in commerce, as opposed to "traveling," which is a God-given right.

Barber has been hauled into court repeatedly over the years and is well known to local judges. When Judge David Lichtenstein found Barber guilty of having disabled vehicles in his yard, he said Barber sent him a letter demanding $6 million in gold.

"He doesn't believe United States currency is legal tender so it's got to be gold, silver," Lichtenstein said.

The sending of letters, called "paper terrorism," is a common sovereign citizen tactic and can be quite threatening -- damaging the personal lives and financial credit of public officials who receive the documents. The FBI says that many Sovereign Citizens are engaged in tax, debt and foreclosure avoidance schemes. There have also been cases in recent years where Sovereign citizens have engaged in fraudulent lien and judgment schemes.

Another local Birmingham, Ala., judge, Raymond Chambliss, found Barber guilty of an environmental infraction, and when he went to take out a second mortgage on his home, he found that Barber had placed a $15 million lien against him.

"I went ballistic," Chambliss said. "I was unable to get the loan."

Barber told "Nightline" that he has zero qualms about using this tactic and said he believes God would approve of what he is doing.

"I don't see it as 'harassment' at all," he said. "It's no more 'paper terrorism' than them giving me a ticket for something that I didn't do--if they are coming--going after my Constitutional rights, my God-given rights, and, [take them] away from me, then they should pay."

But the conflicts between Barber and his followers and the government have recently taken a darker turn. Barber's son Joshua Allen Barber was arrested for driving without a license in the small town of Morris, Ala. Afterwards, Donald Barber began a barrage of "paper terrorism" to police chief Brian Cochran and local judges that included lines like, "Ya better get out of dodge--while the gittin is good--because a new sheriff is about to ride up on you."

Cochran said it was the first time he had to deal with sovereign citizens.

"You're worried that maybe they are going to follow through with, in all accounts, a kidnapping threat, what they're going do if they do snag you or they're going come after your family even," Cochran said.

But Barber insisted his letters are being misconstrued and called Cochran "arrogant" and "very abusive," even accusing the police chief of threatening him.

However, local prosecutors didn't see it that way. Police recently raided Barber's home in July 2010 and Donald Barber was arrested and charged with multiple felonies for harassment. According to police, the family had their own ID badges, hunting licenses and pistol permits, authorities said.

Donald Joe Barber was charged with multiple felonies for harassment after he wrote those letters to local police officers and judges. Both of his sons have charges against them involving sovereign-related activity.

Barber insisted he will always keep up his fight against the government peaceful, but he did make some forceful statements.

"We need a revolution, but not a violent one," he said. "I don't see a need for violence."

But sovereign citizens do have a history of turning violent. In 2010, two police officers pulled over Jerry Kane and his 16-year-old son Joe Kane for what police said was a routine traffic stop on Interstate 40 in West Memphis, Ark., -- the Kanes were sovereign citizens who used to teach people how to use sovereign legal theories to get out of debt. After being pulled over, Joe Kane burst out of the car with an assault rifle and killed the officers. The Kanes were later cornered and killed in a shoot out with police in a Wal-Mart parking lot.

Police chief Bob Paudert recalled the events of the day when he rushed to the scene.

"A call comes over my radio, says 'officer down,' then says 'two officers down,'" Paudert said. "So I run up the hill and one of my sergeants stops me and says, 'chief, please don't go up there,' so I knew it had to be Brandon."

Brandon Paudert, the chief's son and a fellow officer, was dead.

"It was the most horrible, horrific day of my life," Paudert said. "I've never experienced any kind of pain like that and still in pain."

Paudert said before that day he had never heard of sovereign citizens, and now he travels the country to teach local law enforcement officials about them, he says, "from militia members in Alaska accused of threatening to execute judges to black sovereigns in Atlanta who use the ideology to justify occupying foreclosed homes."

He added that he sees a common progression toward lethal violence.

"Once they get into the sovereign program and they don't have to pay the mortgage on the house, you know, they don't have to have the cars licensed, they feel a burden has been lifted," Paudert said. "But when they find out they do have to go by the laws of the land and they start getting traffic citations, they become mad and angry at law enforcement."

Back in Alabama, Donald Joe Barber and his son will go to trial in June and could face decades in prison. Even still, Barber said he has no regrets.

"Just as a soldier goes over to Iraq or to Iran or any other country to fight a battle, he is going over there because he loves his country. I can't do any less," he said.